Binance CEO: "Impact of FTX Incident Will Gradually Decrease... Recovery Fund Being Prepared"

Zhao Changpeng Binance CEO Photo by Reuters

[Asia Economy Reporter Jeong Hyunjin] Zhao Changpeng, CEO of Binance, the world's largest cryptocurrency exchange, assessed that while the cryptocurrency market could be affected by the liquidity crisis and bankruptcy filing of the major exchange FTX, the impact will diminish over time. He stated, "In about five years, when we look back at this time, we will see that the cryptocurrency industry has become stronger," and revealed that he is preparing a recovery fund for the industry.

On the 14th (local time), CEO Zhao tweeted about the spread of the cryptocurrency crisis, saying, "There will be some cascading effects. However, over time, the impact will decrease." He added, "Usually, the biggest ones fall first in such situations," citing the sharp drop of Bitcoin, the leading cryptocurrency, and explained, "The effect gradually becomes smaller."

CEO Zhao also disclosed that Binance has seen a slight increase in withdrawals. However, he emphasized, "This is a typical pattern seen during downturns in the cryptocurrency market," and firmly stated that there is no large-scale customer withdrawal event like a 'bank run.'

CEO Zhao is the key figure who triggered the current FTX incident. CoinDesk, a specialized media outlet in the coin industry, reported financial instability rumors about Alameda Research, a sister company of FTX. Subsequently, on the 7th, CEO Zhao tweeted that Binance would sell all FTT tokens, FTX’s own issued coin held by Binance. As a major figure in the cryptocurrency industry posted such a tweet, a massive withdrawal event at FTX occurred. Binance also announced it would acquire FTX, which was facing a liquidity crisis, but withdrew the offer after one day, leading FTX to eventually file for bankruptcy protection.

Regarding this, CEO Zhao explained, "I had no intention of causing turmoil in the cryptocurrency market," and said he did not expect his tweet to cause such damage. He stated that he will help struggling companies and "establish an 'industry recovery fund' to reduce the cascading negative effects." Without mentioning specific details, he added that more information about the fund will be revealed soon. CEO Zhao emphasized the need for the cryptocurrency industry in crisis to regain trust, saying, "Cryptocurrency will not disappear. We are still here. Let's rebuild."

Bloomberg reported, "One of the shattered images due to FTX’s collapse was that of Sam Bankman-Fried, FTX CEO, as the savior of the cryptocurrency industry," and conveyed the atmosphere that "now CEO Zhao seems to want to take on that role himself."

This content was produced with the assistance of AI translation services.